Oil rises on China's policy rate cut for economic boost

Shafaq News / Oil prices edged higher on Tuesday as China unexpectedly cut key policy rates for the second time in three months to shore up a sputtering economic recovery, but sluggish economic data from the country put a lid on gains.

Brent crude futures rose 11 cents, or 0.1%, to trade at $86.32 per barrel at 0414 GMT. U.S. West Texas Intermediate crude was up 7 cents, also 0.1%, to $82.57 a barrel.

Prices turned higher after the People's Bank of China (PBOC) lowered the rate on 401 billion yuan ($55.25 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 15 basis points to 2.50% from 2.65%.

The cash injection was to counteract factors including tax payments in order to "keep banking system liquidity reasonably ample", the PBOC said in an online statement.

"The market was expecting the PBoC to wait until September before easing again, and today's cuts suggest that the authorities' concern about the state of the macroeconomy is mounting," said Robert Carnell, regional head of research from ING bank, in a note.

(Reuters)